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Crypto: Is Relative Value Investing Time Finally Here?

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For at least the past six months you have been kind enough to listen while the topic of relative value in cryptocurrencies has repeated more than once.  Could it finally be happening? Things are certainly in place. It seems to show every time the price of Bitcoin or any of the altcoins suddenly spikes for no apparent reason.

That is the time when investors buy crypto simply because there is no better value in things like stocks, bonds, real estate, gold or currencies.  So far this has not happened all that often, but things could finally be changing. The fact that crypto prices remain near 2018 lows, and with certain exceptions, the news has been pretty good, helps set the stage.

Until now investors in conventional assets have been simply too content.  And why not, the economy in the US is humming at a 4.2% annual rate. The S&P 500 has tacked on another 8.5% so far and seems to be cruising through the traditionally volatile month of September to reach new records.  

And here is the real tattle tale, the CBOE VIX is near 2018 lows around 11. Without going into all the details, the VIX is Wall Street’s traditional measure of investor fear.  During the 2008 financial crisis, the VIX hit 60. Back in February it was at 37. That was about the time the S&P 500 fell 10%. So get the idea: today, investors are too content.  That needs to change before crypto’s relative value shines through. Here is something to focus on.

The key to the above average S&P performance has been the contribution of the tech sector. When you take out the near 22% increase from the market cap weighted S&P, well, you cut well over half of that performance down to only about 3%.  That still not bad, but it indicates a far more narrow market than smart investors should be comfortable with. What would happen to the VIX if the tech sector suddenly took a dive of 10%?

Sound crazy? Hardly, a 10%+ correction in tech stocks has taken place three times just since 2016, so this isn’t a far fetched idea.  In fact Barbara Kollmeyer at MarketWatch just penned an article titled: Bad news is building for this once-hot tech sector.  If her views prove out, this could be the key to driving investors to some of the values offered by crypto.

It all starts with the social media companies that form the backbone of the FANG stocks. Here is a sample. She opens with the thoughts of Tony Greer who heads TG Macro and who has a sour message on Twitter (TWTR) and Facebook (FB). According to Tony: “It’s finally time to be short social media” pointing out a “massive topping pattern.”

While the stock market generally may not be experiencing traditional levels of volatility, lately tech stocks have charted a different course.  In referring to that change, Greer identifies September as a time of big change.

“That period of volatility put in a big top and a double top in the social media ETF. Now it has broken its steepest ascending trend line, it’s broken down below all the major moving averages and they’re starting to curl over on top of it, which to me is going to cause another leg of a waterfall.”

The final proof of technical weakness is shown in the Global X Social Media ETF that contains a handful of social media names from Facebook, Twitter and Alphabet. This little gauge is actually down around 3% this year.

In addition to his technical observations, he points the negativity surrounding the Cambridge Analytica scandal, subsequent upbeat earnings, then news that the platform was losing users.

Technology Is More Than Social Media

Lest we look for just any reason to be buying crypto it is only fair to mention the obvious. So far this year the tech sector has managed to add 22% even with the substantial underperformance of social media.  Any notion of painting the world coming to an end would be misleading.

However, technology has many interrelated links and sometimes when one sector is under pressure it can spread.  In the meantime the gap between overvalued stocks and depressed crypto prices is setting the stage for the search for value to have its day in the sun. So keep one eye on the VIX.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 115 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Altcoins

Bitcoin Cash Price Analysis: Bullish Pennant Pattern Confirmed

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  • Bitcoin Cash price remains very much elevated, as the bulls continue to run north.
  • BCH/USD price action has formed a bullish pennant pattern formation, subject to a breakout higher.

BCH/USD: Recent Price Behavior

The Bitcoin Cash price has been a notable out-performer over the past few sessions, with the BCH/USD pair rallying as much as 23% since 17th February. In doing so, it reached its highest levels in over six weeks. The aggressive move north came after a prolonged period of range-bound trading via the daily chart view.

Between 8th – 17th February, BCH/USD was moving within an extremely narrowing range-block formation. This represented a lack of commitment from both camps after being confined within a range low of $117 to a high around $125. On 18th February, the bulls managed to force a breach and daily closure above the confines of the mentioned range.

Coinbase Adds Bitcoin Cash Support to Wallet App

Coinbase, a U.S.-based cryptocurrency exchange and wallet service provider, announced it has added support of BCH to its Coinbase Wallet.

“The new Wallet update with Bitcoin Cash support will roll out to all users on iOS and Android over the next few weeks,” the company said in an official blog post.

The app will facilitate support for both CashAddr and legacy addresses. Private keys will be encrypted on the mobile device by the Coinbase mobile wallet. Last week Coinbase announced the following: “users can now back up an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.”

Technical Review – BCH/USD

BCH/USD 4-hour chart.

At the time of writing, the BCH/USD price is still holding at elevated levels, with gains in the session amounting to 2.5%. Over the last two sessions, between 19-20th February, the price action has somewhat moved within a range. The detailed price behavior has seen a bullish pennant pattern formation, which is subject to a further potential move north.

Near-term resistance is eyed at $145.50, where the upper acting trend line of the pennant is tracking. Should the bulls manage to break this down, then expect a fresh wave of selling pressure to kick in. To the upside, eyes will then be on supply observed up within the $160-$165 price range.

In terms of near-term support, the lower acting trend line of the pennant which is tracking at $140 is the next major target; a breach could then expose critical daily support at $137. Lastly, if neither safety nets protect the price from falling, then there runs the risk of a full reversal of the recent gains.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 125 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Altcoins

Litecoin, EOS, Binance Coin, Maker: Altcoins Leading the Charge

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Crypto valuations experienced a slight pullback Wednesday, though a small contingency of altcoins continued to see impressive gains, a sign that the latest uptrend still had room to mobilize.

Crypto Market Update

Most of the top 20 cryptocurrencies reported losses overnight, raising the specter of a ‘bull trap’ following the latest recovery attempt. The downside risk has since moderated, with a small handful of altcoins reporting gains.

EOS (EOS) gained 4.4% to $3.80, extending an early-week rally that pushed prices to nearly three-month highs. The Enterprise Operating System is up more than 30% since Sunday.

The Litecoin (LTC) price crossed $51.00 for the first time since mid-November, gaining 4.8% in the process. The cryptocurrency has gained a whopping 80% over the past two weeks, which helped to engineer a market-wide rally. Read more: Litecoin Sparks Huge Crypto Rally as Bitcoin Smashes Through $3,700.

Litecoin is benefitting from adoption progress after SpendApp announced it will begin supporting the cryptocurrency at more than 40 million locations. Combined with the anticipated ‘halving’ event in August, Litecoin continues to attract strong bids.

Meanwhile, the meteoric rise of Binance Coin (BNB) continued on Wednesday. The price surged 11% to $10.94, the highest since last August. Binance Coin is benefiting from positive publicity tied to its underlying exchange, including the launch of a new token sale platform.

Maker (MKR), which is comprised of a stablecoin, collateral loans and a decentralized governance framework, rounded out the big gainers on Wednesday. MKR jumped 10.4% to $652.10, placing it in 16th in terms of market cap.

Want an introduction to MKR? Read: What’s Driving Maker (MKR)? High-Priced Coin Outshines Peers.

The combined cryptocurrency market cap is currently valued at $134.8 billion, up from an earlier low of $132.3 billion.

Does the Rally Have Legs?

While appearing sudden, the crypto rally that began on Sunday was actually weeks and perhaps even months in the making. As Hacked predicted before the rally, the sharp rise in coin circulation and overall trading volume, combined with the relative decline in volatility, pointed to higher prices in the near term.

On Tuesday, bitcoin’s 24-hour trading volume topped $10 billion for the first time in ten months. Market-wide volumes spiked above $36 billion, levels not seen since last May. And that’s just what digital exchanges are reporting.

Anyone still doubting whether institutional traders are accessing crypto should pay close attention to private bilateral contracts. This private market has scaled up to between $125 million and $500 million per month in the last half year, according to Bloomberg. Recent activity shows that traders have zeroed in on the $4,200 price target, and some are betting large sums that bitcoin can top this level by the spring.

Bitcoin is currently trading just above $4,000 on Bitfinex. While its share of the overall market has declined over the past 48 hours, it is by far the biggest bellwether for cryptocurrencies. Where bitcoin goes, the market follows.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Tron Price Analysis: TRX/USD Bulls Dealt a Blow as Bearish Daily Candlestick Eyed

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  • Tron (TRX) was forced to give up the recent run higher after closure in the red on Tuesday.
  • TRX/USD saw a bearish candlestick formation on the daily chart yesterday, somewhat of a shooting or evening star.

The Tron price after a decent push north over the past few sessions saw a minor slowdown on 19th February. TRX/USD gained around 12% from 15th-19th February, as the price managed to find its feet following a break of key support. An ascending trend line was initially running from the back-end of December 2018 up until a breach on 11th February.

At the daily close on 19th February, the candlestick formed somewhat of a bearish shooting or evening star. Should this play by the textbook, then it signals some further potential downside pressure to come. A confirmation of the price moving back south and possibly reversing the recent run of gains would need to see another bearish closure on the daily.

BitGo to Support Tron

Tron announced that BitGo is adding TRX to the list of cryptocurrencies that it supports later this year. BitGo is a digital asset financial services organization offering wallet and custody support. The company already accommodates the likes of bitcoin and Ethereum, plus over 100 other cryptocurrencies.

The CEO and founder of Tron Justin Sun commented following the announced:

“As TRON and its subsidiary BitTorrent work toward our vision of creating a new internet economy that is fast, secure, and cost-effective, we need to work with the companies that can provide that secure foundation. With BitGo, TRX investors will have the most secure wallet and custody options.”

Elsewhere the chief technology officer at BitGo spoke on the latest update to support Tron:

“As TRON and its subsidiary BitTorrent work toward our vision of creating a new internet economy that is fast, secure, and cost-effective, we need to work with the companies that can provide that secure foundation. With BitGo, TRX investors will have the most secure wallet and custody options.”

Technical Review – TRX/USD

As detailed above, the daily candlestick observed yesterday was a bearish closure, ending the run of gains seen of late. If there is to be additional selling pressure, the bears would need to force another close in the red. Should the momentum to the downside pick up the pace, then eyes will be on the next area of support. Daily comfort is provided at $0.023550 $0.021500, $0.018700 and then $0.01750-$0.01600.

In terms of upside targets, the bulls would be looking to break back above the breached ascending trend line. The resistance is currently tracking around $0.027500, and a push north of this could put TRX/USD in an excellent running to retest $0.030000 territory. A large amount of supply is noted through much of this area. If this is successfully broken down, then a fast move could take place up to $0.040000 region.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.            

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 125 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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